On Wednesday, H.C. Wainwright adjusted its price target for Marathon Digital Holdings (NASDAQ: NASDAQ:MARA), a cryptocurrency mining company, from $27.00 to $28.00, while keeping a Buy rating on the stock.
The firm's decision followed the announcement of Marathon Digital's third-quarter financial results, which showed a revenue of $131.6 million, a 9% decrease from the previous quarter's $145.1 million.
Despite the revenue dip in the third quarter of 2024, Marathon Digital reported a significant increase in its energized hash rate, which is a measure of the computational power used for mining cryptocurrencies. The hash rate rose by 17% sequentially from 31.5 exahashes per second (Eh/s) to 36.9 Eh/s, with an operational rate of 40.2 Eh/s recorded in October. The company remains on track to reach its year-end target of 50 Eh/s.
Marathon Digital has also made strides in cost efficiency, with the cost per petahash per day falling by 10% to $37.1 in the third quarter from $41.0 in the second quarter. This improvement reflects the company's transition to more self-owned and operated sites, which allows for better cost management.
The company's strategic approach to energy usage has been a key factor in its efficiency gains. Marathon Digital focuses on utilizing near-zero-cost energy sources, such as converting flared gas into power for its micro data centers. This initiative is part of the company's broader goal to minimize energy expenses while reinforcing its commitment to sustainable and efficient cryptocurrency mining.
"Recognizing MARA™s strategic growth, efficiency, and innovation, we reiterate our Buy rating and push our target to $28," added the firm.
On its earnings call, Marathon Digital Holdings (MARA) announced the acquisition of approximately 372 megawatts of capacity across three sites in Ohio, which is expected to increase its total nameplate capacity to nearly 1.5 gigawatts. MARA also emphasized its Bitcoin holdings, with nearly 27,000 Bitcoin valued at roughly $2.5 billion.
The company's CEO, Fred Thiel, unveiled a strategic focus on reducing operational costs and leveraging partnerships for lower electricity rates. The CFO, Salman Khan, highlighted the company's disciplined acquisition strategy and hybrid approach to Bitcoin investment for financial flexibility. Financial highlights for the quarter include a 93% increase in energized hash rate and a 35% rise in revenues year-over-year.
MARA plans to continue its hybrid strategy of buying and mining Bitcoin and scaling operations through partnerships and innovative technology in miner hardware. Despite challenges in the competitive AI and HPC hosting market, the company remains focused on delivering high-value solutions.
InvestingPro Insights
Marathon Digital Holdings' recent performance and strategic initiatives align with several key insights from InvestingPro. The company's revenue growth of 224.69% over the last twelve months, as reported by InvestingPro, underscores its strong market position in the cryptocurrency mining sector. This impressive growth rate supports H.C. Wainwright's optimistic outlook and increased price target.
InvestingPro Tips highlight that Marathon Digital is trading at a low P/E ratio relative to near-term earnings growth, with a PEG ratio of 0.19. This suggests that the stock may be undervalued considering its growth prospects, which aligns with the analyst's bullish stance. Additionally, the company's strong return over the last three months, as noted in another InvestingPro Tip, reflects the market's positive response to Marathon's operational improvements and strategic initiatives.
It's worth noting that InvestingPro offers 18 additional tips for Marathon Digital, providing investors with a comprehensive analysis of the company's financial health and market position. For those seeking a deeper understanding of Marathon Digital's investment potential, exploring these additional insights on InvestingPro could prove valuable.
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